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Sir!
i want to ask about logic of dec 2011 q2 part b in which material cost is calculated by (60000*265 and 20000*200)=19900 but problem is that y we not multiply 20000 with 65 instead of 200Division A is producing 80,000, and for all of them they have to pay for “other materials from external suppliers” at $200 each.
For 60,000 they are also buying “fittings” externally at an extra cost of $65 – so a total cost of $265.
(for the other 20,000, they are buying “fittings” internally from B at a cost of $65, but this is shown as an internal transfer in the statement, so the only external cost is the $200.)
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